• Hawkish Hold By The Bank of Canada

    External Author   |  

    Blog by Kolbi Turner

    The Bank of Canada today held its target for the overnight rate at 5%, as was widely expected. The central bank continues to normalize its balance sheet through quantitative tightening, reducing its Government of Canada bonds holdings.

    The Monetary Policy Report (MPR) detailed a slowdown in global economic growth “as past increases in policy rates and the recent surge in global bond yields weigh on demand.” Continued increases in longer-date bond yields reflect the stronger-than-expected growth in the US, where the Q3 economic growth rate, released tomorrow, is expected to be a whopping 5%. Ten-year yields in the US have risen to nearly 5%, boosting fixed mortgage rates in Canada.

    Oil prices are higher than was assumed in the July MPR, and the war in Israel and Gaza is a new source of geopolitical uncertainty.

    Read More »


  • Canadian Inflation Dips to 3.8% Keeping BoC On The Sidelines

    External Author   |  

    Blog by Kolbi Turner

    Good news on the inflation front suggests policy rates have peaked

    Today’s inflation report for September was considerably better than expected, ending the three-month rise in inflation. Not only did the headline inflation rate fall, but so did the core measures of inflation on a year-over-year basis and a three-month moving average basis. This, in combination with the weak Business Outlook Survey released yesterday, suggests that the overnight policy rate at 5% may be the peak in rates. While I do not expect the Bank to begin cutting rates until the middle of next year, the worst of the tightening cycle may well be over.

    Read More »


  • August Inflation Hotter Than Expected In Canada

    External Author   |  

    Blog by Kolbi Turner

    August Inflation Hotter Than Expected

    Canada’s inflation rate accelerated more than expected for the second consecutive month, mainly driven by higher gasoline prices. This will not be a one-month wonder as gasoline prices rose further in September. 

    Read More »


  • Bank of Canada Holds The Overnight Policy Rate Steady at 5%

    External Author   |  

    Blog by Kolbi Turner

    Bank of Canada Holds Rates Steady Acknowledging Economic Slowdown

    With last Friday’s publication of the anemic second-quarter GDP data, it was obvious that the Bank of Canada would refrain from raising rates at today’s meeting. Economic activity declined by 0.2% in Q2; the first quarter growth estimate decreased from 3.1% to 2.6%.

    Read More »


  • Weaker Than Expected Jobs Report Portends No Rate Hike By BoC

    External Author   |  

    Blog by Kolbi Turner

    The long-awaited labour market slowdown The Canadian economy shed 6,400 jobs in July, far weaker than the 25,000 gain that was expected. The jobless rate was 5.5%, the third consecutive monthly rise. This likely improves the chances the Bank of Canada will remain on the sidelines in September. Wage inflation, however, re-accelerated, moving back to 5.0%. This, combined with the continued stickiness in core inflation, will keep interest rates high for longer. July’s data follows a surprise gain of 59,900 in June and a 17,300 loss in May, showing that employment is a notoriously volatile series. Nevertheless, it provides the fodder for Macklem…

    Read More »


  • Bank of Canada Hikes Policy Rate By 25 BPs to 5.0%–Highest in 22 Years

    External Author   |  

    Blog by Kolbi Turner

    Interest rates will stay higher for longer

    The Bank of Canada increased the overnight policy rate by 25 basis points this morning to 5.0%, its highest level since March 2001. Never before has a policy action been so widely expected. Still, the Bank’s detailed outlook in the July Monetary Policy Report (MPR) suggests stronger growth and a longer trajectory to reach the 2% inflation target. The Bank of Canada believes the economy is still in excess demand and that growth will continue stronger than expected, supported by tight labour markets, the high level of accumulated household savings, and rapid population growth. “Newcomers to Canada are entering the labour force, easing the labour shortage. But at the same time, they add to consumer spending and demand for housing.”

    The Bank forecasts GDP growth to average 1.0% through the middle of next year–a soft landing in the economy. “This means the economy moves into modest excess supply in early 2024, and this should relieve price pressures. CPI inflation is forecast to remain about 3% for the next year, before declining gradually to the 2% target in the middle of 2025.” This is about six months later than the Bank expected in April. This means that high-interest rates remain higher for longer.

    Read More »


  • In an Aggressive Move, the BoC Hikes the Policy Rate by 25 BPs

    External Author   |  

    Blog by Kolbi Turner

    In an Aggressive Move, the BoC Hikes the Policy Rate by 25 BPs

    Holy smokes, the bank of canada means business

    If there were any doubt that the Bank of Canada wanted inflation to fall to 2%, it would be obliterated today. In a relatively surprising move, the Bank hiked the overnight policy rate by 25 bps to 4.75%, and an equivalent hike will follow in the prime rate. Fixed mortgage rates had already leaped higher even before today’s move as market-determined bond yields have risen in the wake of the US debt-ceiling debacle. Now variable mortgage rates will increase as well. The central bank is determined to eliminate the excess demand in the economy.

    Read More »


  • Canadian CPI Inflation Ticked Up For The First Time In Nearly A Year.

    External Author   |  

    Blog by Kolbi Turner

    Canadian Inflation Rose More Than Expected in April, But Core Inflation Slowed

    There’s been an unexpected hiccup in the Bank of Canada’s ongoing battle against inflation. Year-over-year, price pressures escalated to 4.4% in April, an uptick from the previous month’s 4.3% and significantly exceeding the average economist’s prediction of 4.1%. This marks the first rise in overall inflation from the last June. Ironically, higher interest rates are intended to tackle inflation, but rising rent prices and mortgage interest costs contributed the most to the all-items CPI increase last month.

    Read More »


  • Bank of Canada Holds Policy Rate at 0.25% and Maintains QE Program At Current Pace

    External Author   |  

    Blog by Kolbi Turner

    Bank of Canada Holds Rates and Bond-Buying Steady

    Much has changed since the Bank of Canada’s last decision on January 20. While the second pandemic wave was raging, new lockdowns were implemented in late 2020, and there were fears that the economy, in consequence, was likely to grow at a 4.8% annual rate in Q4 and contract in Q1. Instead, the lockdowns were less disruptive than feared, as Q4 growth came in at a surprisingly strong 9.6% annual rate–double the pace expected by the Bank.

    Rather than a contraction in Q1 this year, Statistics Canada’s flash estimate for January growth was 0.5% (not annualized). Strength in January came from housing, resources and government spending, and the mild weather likely helped. In today’s decision statement, the central bank acknowledged that “the economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures.” The BoC now expects the economy to grow in the first quarter. “Consumers and businesses are adapting to containment measures, and housing market activity has been much stronger than expected. Improving foreign demand and higher commodity prices have also brightened the prospects for exports and business investment.”

    Read More »


  • Family Day Ideas

    Kolbi Turner   |  

    Blog by Kolbi Turner

    For those who celebrate Family Day, we thought we would highlight some ideas for special things you can do with your loved ones, and remind them how much you care!

    From crafts and cooking to volunteer work or exercise classes, below are a few ways you can celebrate Family Day this year:

    Family Day Ideas

    Read More »


  • Economic Insights from Dr. Sherry Cooper

    Kolbi Turner   |  

    Blog by Kolbi Turner

    Even bond traders and economists are stumped about what the next few years will bring. The repercussions of a global economy that stopped suddenly, shed millions of jobs and initially contracted 30% only to rebound in a flash on the back of free-money government programs are still being felt.

    Economic Insights from Dr. Sherry Cooper

    Read More »


  • What to Know about Second Mortgages

    Kolbi Turner   |  

    Blog by Kolbi Turner

    A second mortgage is a mortgage that is taken out against a property that already has a home loan (mortgage) on it. Generally people take out second mortgages to satisfy short-term cash or liquidity requirements, have an investment opportunity or to pay off higher-interest debts (such as credit cards and student loans) that a second mortgage might offer.

    What to Know about Second Mortgages

    Read More »


  • Bank of Canada Hikes Overnight Rate 50 bps to 4.25%

    External Author   |  

    Blog by Kolbi Turner

    the bank of canada hiked rates the full 50 bps

    The Governing Council of the Bank of Canada raised its target for the overnight policy rate by 50 basis points today to 4.25% and signalled that the Council would “consider whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target.” This is more dovish language than in earlier actions where they asserted that rates would need to rise further. Some have interpreted this new press release to imply that the Bank of Canada will now pause or pivot. I disagree.

    I expect there will be additional rate hikes next year, but they will be more measured and not on every decision date. I also feel that the Bank will refrain from cutting the policy rate until 2024.

    Read More »


  • Don't Be House Poor

    Kolbi Turner   |  

    Blog by Kolbi Turner

    Having the biggest and best home on the block sounds great – but not if it is at the expense of your life and monthly finances!

    Read More »


  • Winterizing Your Home

    Kolbi Turner   |  

    Blog by Kolbi Turner

    With the changing of the seasons, it can be a good time to take stock of your home and ensure you are ready for the colder weather.

    Read More »


  • Enjoying a Debt-Free Holiday

    Kolbi Turner   |  

    Blog by Kolbi Turner

    The holidays are coming up! As much as these celebrations bring us joy and harmony, they can also bring us stress. This is particularly true when it comes to your finances!

    Read More »


  • Canadian Housing Activity Slowed Again in September As Prices Continued to Fall

    External Author   |  

    Blog by Kolbi Turner

    Orderly Housing Correction Continues

    There are many unusual aspects to the current housing correction, but fundamentally the most noteworthy is how orderly and non-chaotic it has been. Home sales have slowed, but so have new listings, so the price declines are more muted than we might have expected. This is not a housing collapse. It is a housing correction. We’ve seen little distressed selling, as most would-be sellers have lots of home equity and low mortgage rates–not anxious to buy new properties immediately. Moreover, with rents surging, most potential down-sizers aren’t keen to make that trade-off.

    Read More »


  • Canadian Home Sales and Prices Fell Modestly in August

    External Author   |  

    Blog by Kolbi Turner

    Housing Soften Again in August

    The full effects of the most recent rate hikes have not yet manifested. Statistics released today by the Canadian Real Estate Association (CREA) show that the slowdown that began in March in response to higher interest rates continued in August, albeit at a slower pace. Home sales recorded over Canadian MLS® Systems fell by 1.0% between July and August 2022. The pace of home sales last month was well below its 10-year moving average as buyers and sellers moved to the sidelines in response to rising mortgage rates and a reassessment of the outlook. While this was the sixth consecutive month-over-month decline in housing activity, it was also the smallest of the six.

    Read More »


  • Finally Some Good News On The Inflation Front

    External Author   |  

    Blog by Kolbi Turner

    It was widely expected that US consumer price inflation would decelerate in July, reflecting the decline in energy prices that peaked in early June. The US CPI was unchanged last month following its 1.3% spike in June. This reduced the year-over-year inflation rate to 8.5% from a four-decade high of 9.1%. Oil prices have fallen to roughly US$90.00 a barrel, returning it to the level posted before the Russian invasion of Ukraine. This has taken gasoline prices down sharply, a decline that continued thus far in August. Key commodity prices have fallen sharply, shown in the chart below, although the recent decline in the agriculture spot index has not shown up yet on grocery store shelves. US food costs jumped 1.1% in July, taking the yearly rate to 10.9%, its highest level since 1979.

    Read More »


  • Another Red-Hot Employment Report in Canada. Canadian Labour Market Is Much Too Tight–Adds To Inflation Pressure

    Kolbi Turner   |  

    Blog by Kolbi Turner

    Today’s Labour Market Survey for May 2022 showed that hiring continued at a rapid pace last month in an increasingly tight labour market, driving the jobless rate to another record low and fueling a sharp acceleration in wage gains. The economy added 39,000 jobs in May, surpassing expectations. The unemployment rate fell to 5.1%, far below the noninflationary rate of joblessness. Job vacancies are at a record high, and wage inflation accelerated to 3.9%, from the 3.2% pace posted in April.

    Read More »